Home Forex News Oil Tanks On Demand Concerns As Gold (XAU/USD) Rallies On Risk Aversion

Oil Tanks On Demand Concerns As Gold (XAU/USD) Rallies On Risk Aversion

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  • Oil Demand Concerns
  • Safe-Haven Demand
  • Gold Price Estimates

On Monday morning, oil prices dropped as worries over demand outlook took center stage in the wake of coronavirus infections surpassing the ten million mark. Gold (XAUUSD), on the other hand, was up as investors rushed to the yellow metal to hedge against losses amidst waning hopes of economic recovery.

Oil under Pressure

Brent oil futures were down by 1.86% to $40.17a barrel as West Texas Intermediate fell 2.10% to $37.69 as the U.S continued to battle the biggest surge in coronavirus infections.

Time                            : 06-29-2020

Pivot                           : $37.83

Technical View           : Short Below $37.63

Target                         : $37.43 next 2 targets are $37.18, and $36.84

Comments                  : Weak Bearish

Last Price                    : $38.02

The U.S recording more than 45,000 coronavirus cases continues to rattle the oil markets, given the risk of lockdowns that could take a toll on demand that is already in subdued levels. California has already ordered bars to shutdowns. Florida and Texas have also imposed restrictions designed to curb the spread of the virus.

A new wave of infections has also caused China, New Zeeland, and Australia to impose restrictions on a development that continues to rattle the oil markets. In addition to coronavirus, oil prices continue to edge lower due to poor refining margins, as well as, high oil inventories. Crude inventories in the U.S, the world’s largest consumer has clocked record highs, affirming low demand that continues to take a toll on oil prices.

Gold Rally

Gold, on the other hand, continues to edge higher as investors turn to safe-havens to protect their portfolios against shocks triggered by the COVID-19 disruptions. A spike of cases to 10 million continues to arouse concerns about economic recovery with stocks edging lower.

Time                            : 06-29-2020

Pivot                           : 1771.75

Technical View           : Long Above 1773.92

Target                         : 1776.09 next 2 targets are 1779.55, and 1783.72

Comments                  : Weak Bullish to Neutral

Last Price                    : 1748.89

Technical View           : Short below 1767.91

Target                         : 1768.08 next 2 targets are 1763.99, and 1760.43

Given the waning sentiments about economic recovery amid COVID-19 disruptions, analysts at Morgan Stanley, JPMorgan, and Goldman Sachs insist the precious metal could soar to record levels. Analysts at Goldman Sachs expect the precious metal to hit record highs of $2,000 over the next 12 months.

Investors ahead await t comments from Federal Reserve chair Jerome Powell and Treasury Secretary y Steven Mnuchin likely to influence dollar strength conversely Oil and Gold prices.

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